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over the £16k threshold

princessofdarkness

Hi, Im trying to support a 55yr old person with paranoid schizophrenia. They were in receipt of higher rate ESA, PIP, HB and CTB but cannot spend the money as fast as it comes in and have now gone over the £16k threshold.

Because of their paranoid delusions the financial situation makes their schizophrenia even worse and they wont intentionally overspend or but unnecessary items to keep their savings down.

I have no financial training and little benefit knowledge and Im not sure where we stand now with what they can claim in the future, what is best for them to claim and when to do it.

They are also worried about their class 1 NI contributions.

To make matters more complicated and add to the problems, their condition means that they have sought advice from a few different places locally, including The CAB, and have had all contradicting advice which has increased their anxiety and confusion.

Can anyone advise me please?

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poppy123456

HI and welcome,

Firstly if they haven't already reported the changes they need to do this ASAP and they need to ring their local council regarding their housing benefit and CTR because these will both stop. If there's an overpayment then this will need to be repaid back.

ESA, if part of it is Contributions based they will keep this part (£113.55 per week) and lose just the income related top up. If all of it is Income related then all of it will stop. If it stops they can request it carries on of the NI credit to be paid but it will be worth them having a pension forecast (depending on age) to see how many more yesras are needed. They can do thisa here. https://www.gov.uk/check-state-pension Either way, DWP need to be cantacted to report the changes and they will know which ESA exactly that they are claiming.

PIP isn't means tested and will continue as normal.

If their ESA ends then once their savings go below £16,000, it's highly possible they will have to claim Universal Credit but this will depend how long it will take for their savings to go below £16,000, if they are currently receiving a severe disability premium in another benefit then if their savings go below £16,000 within 28 days they will be able to reclaim all their existing benefits. If it's outside of that time it will be Universal Credit they need to claim.

Hope this helps.

cupcake88

hi there I my self suffer with mental illnesses pychosis is one of them . I personally get very anxious bout any thing to do with money also my partner pays all the bills as I have no income apart from pip which I give some of it to my partner to purchase are food shop as I want to do my bit as well . I only recieve pip as my because of my partners income he doesn’t make loads of money but he makes enough that I’m not entitled to any benefits . Regarding ESA I couldn’t get the contribution one because i hadn’t paid enough National insurance the last few years as I mentally going down I’ll so wasn’t working .

So I can relate to having a serous mental illness and worrying all the time .

I my self worry bout my future with me not being well it’s a horrible fear .

I wish I had 16 k personally ha but I understand this could affect your friends benefits great advice above please let us know how you get on .

It’s a shame these rules are put into place . But I would explain that not spending is apart of his illness .

cupcake88

I hope your friend gets sorted .
sorry I can’t give factual advice
@poppy123456 is the expert.

i hope your friend gets on ok

Tori_Scope

Hi all!

We've reviewed this discussion, and reopened it so that other members can comment once again. We've moved the comments regarding state pension over to a new discussion.

Welcome to the community @princessofdarkness

I hope that the above advice has been helpful, but please do let us know if you have any further questions. We look forward to seeing you around on some other discussions too!

princessofdarkness

Thanks for your help poppy123456 and empathy cupcake88.

Urgh, Its so complicated! Finances are scary at the best of times.

I think the ESA is all income based. DWP and all agencies have been informed.

If their savings drop below £16k in the next 28 days and they reclaim will that not just put us back in the same situation in another 28 days? - the savings go above and we do the dance again?

cupcake88

This may seem like a really silly question but could your friend not just spend some of it I know they don’t want to spend but do they not have any bills they might be behind on they can spend it on .

Does your friend do there own food shopping I’m guessing they get help . I’m just thinking if your friend spends some of the money and then spend some of the monthly benefits then they wouldn’t loose there benefit .

I’m not sure how it works if your savings go like a pound over will they cut the benefits I’m guessing they will do they stop the benefits completely ? Of course pip won’t be stopped but the others will and then if there not getting regular money in that could affect them later on down the line. So is there any chance they can spend some of it .

But having mental illnesses my self when I was really ill I had no income my bills racked up I ignored them they racked up I managed to get help to email them and have them put on hold so at some point when I’m working again I’ll have Debt to pay . I know what it’s like to be completely unaware of money in your bank account as well so it’s easily done . I my self don’t have 16 k ha but I know what it’s like to loose track of things .

Would spending and keeping it under 16 k be ok ?

OverlyAnxious

princessofdarkness said:

If their savings drop below £16k in the next 28 days and they reclaim will that not just put us back in the same situation in another 28 days? - the savings go above and we do the dance again?

I think you have 2 realistic options here.

Either help them to spend a good chunk of the money in one go so that it takes months before they're back in this position - could they use a new TV or washing machine for example? Or a new bed or sofa?

Or just stop claiming the benefits for a few months and use the savings until it drops to a more suitable level. If they've got that much in savings currently, they don't need all of that income, despite being entitled to it. Moving to UC and losing a few pounds a week compared to ESA/SDP when they reclaim doesn't sound like it would affect them.

poppy123456

princessofdarkness said:

If their savings drop below £16k in the next 28 days and they reclaim will that not just put us back in the same situation in another 28 days? - the savings go above and we do the dance again?

Yes, that's issue here, if they don't spend the money. I have to agree with overlyanxious here, is there anything they need for their home? Maybe replace some older furniture, pay some bills if they are behind with anything, although with all that savings they may not have any bills.

At the moment the SDP transitional protection rules will apply to them within the next month but after this time they will need to claim Universal Credit when their savings drop below £16,000 and there's no SDP payable on this, so they will be worse off financially. Although after middle of January the SDP rule which prevents people from claiming UC will end.

newborn

Cupcake 88 you have all my sympathy as does everyone battling the various inflexible systems. The 'depriving yourself of assets' rules can be interpreted in unexpected ways, so people have to be extremely careful of spending any savings.
As an example: B.B.C. Radio 4 featured one person who was in hopeless debt all over the place, and had sold her home, but her ex husband was entitled to half, so her share was below what she needed for the debts. She needed first to put a rental deposit on somewhere to live, then to start trying to clear off her debts.

As far as I remember the story, I think she was unemployed at the time, and needed income to live on. The money in her account was half her husband's, part for costs of getting a new (rented) roof over her head, and the rest was needed to start paying off debts.
Ignoring the debts was an option she couldn't afford, because gradually, each creditor was starting to take court action. That meant her debts would possibly double, because she would be liable for any court costs and bailiffs costs as well.

There simply wasn't any money left over for her to pay food and bills, until she could find a new job.
When she asked about claiming any benefits, she was told that her bank statement showed she had savings, so she was banned. She tried to find out from the B.B.C money experts if that was right. It was, She was told she was not allowed to spend anything from her savings, or it would be 'wilfully depriving herself of assets'. The benefits people had been correct, when they said even though she had proof of her debts, and that some were threatening court action, everything would be ignored and nothing allowed to be offset, against that sum in her bank. The only exception was the first creditor, who had already gone to court and got an order against her. She was only permitted to pay that, and the two sets of legal fees, and court costs and bailiffs costs.

That does seem harsh, but it would make other people worried about what would look like suspiciously depriving themselves of assets, even though there was obviously nothing suspicious about it at all. I think in the same programme they had other cases which also looked very harsh.

poppy123456

One good thing about Universal Credit is that paying off any debt is not classed deprivation of capital, even if the debt is not immediately repayable.

cupcake88

@newborn I think having a mental illness and not spending and having a lot of savings is very different to the example you just gave .

im sure if some one who is in the situation as the person above if they wanted to spend some of it on new furniture or bills to make some space in there account I don’t see how the dwp will have a problem with that correct me if I’m wrong .

I’m not of much knowledge of benefits but I know what it’s like to have a acute mental illness . If you some how have 16 k I don’t see how there be much harm in spending some of that on things you may need to make Space .

cupcake88

Am I missing some thing I didn’t think the first post was regarding debt that needed to be paid I thought the post was about having savings that reach to the amount the government say you can’t go over .

i struggle to take information in so im just checking I’m on the right track x

poppy123456

cupcake88 said:

Am I missing some thing I didn’t think the first post was regarding debt that needed to be paid I thought the post was about having savings that reach to the amount the government say you can’t go over .

i struggle to take information in so im just checking I’m on the right track x

No, you're not missing anything at all @cupcake88 the thread isn't about debt, it's about savings. @newborn has just continued to de-rail the thread, with a topic that's totally unrealated.

Ross_Alumni

Just a friendly reminder to stay on topic as much as possible please, this thread is for the query of the opening poster.

@princessofdarkness, has any of the advice you've received here been helpful? is there anything else you need to ask, or need clarifying?

Oh and welcome to the community, glad to have you aboard.

newborn

The thread includes mention, perfectly sensibly, of what to do about the problem of having savings, due to the fact that inflexible rules tend to regard spending your savings as 'depriving yourself of assets'. In many circumstances and for many people, they are doing nothing of the sort, but the rules can catch them out.
I cannot give examples of the exact same circumstances as the o.p., but I can give examples of other situations where the fact of having savings has been taken by officials as meaning the same thing as having the resources of a rich person, and the spending of savings has been taken as 'being up to somehing '
I have never posted anything I believe irrelevant
I have never posted anything I believe hostile
I have never posted anything I believe factually incorrect
I have never, and would never, post personal attacks
I have only ever attempted as kindly as possible to be as helpful as possible
I would never make scathing comments about anyone
I am disappointed to be trolled

cupcake88

@newborn no one is trolling you that’s harsh to say you are being trolled . I think this thread should be Kept on topic no one is trolling you .

Your example you used for very confusing and not to do with the original question . No ones saying you can’t post or have a opinion .

poppy123456

@newborn sorry but i have to agree with @cupcake88 here. I don't see anyone trolling you but your posting comments that are not relevant to the original question.

There's not any guidlines to what exactly deprivation of capital is as regards to buying things with your savings. Provding a person doesn't buy the most expensive things then there shouldn't be any problems and if they are worried they should keep receipts to prove what they spent their money on.

For legacy benefits such as Income Related ESA/JSA and Income Support then paying off debt is seen as deprivation of capital. Giving money away for all mean tested benefits is deprivation of capital. However, deprivation of capital wasn't the original question so i don't even know why you brought the subject up.

@princessofdarkness i'm sorry your thread has been derailed again but if you have any further questions please do ask.